Carl Weinschenk spoke with Michelle Abraham, a principal analyst with In-Stat, who this week released a research report on the worldwide market for video surveillance equipment.

Weinschenk: How is video surveillance generally incorporated into an organization?
Abraham: Video surveillance oftentimes is part of a security department in a large organization, not necessarily part of the IT department. The goal is to protect the physical premises and the people that work there as well as the company itself.

Weinschenk: What kinds of equipment and systems are we talking about?
Abraham: The equipment that was analyzed in the report starts off with the cameras that are used to capture video streams. There may be cameras with encoding devices, or [a separate] encoding device or a device placed in the network or the end point of the coax if it is an analog system. Those are the three main types we analyzed for the reports. There also are monitors and, depending on the network, there may be routers and switches to switch between camera views or equipment to route signals and equipment to access the video streams remotely.

Weinschenk: Is it IP?
Abraham: At this point, there are still a lot of coax systems. IP is more recent. They are using IP in video surveillance systems. They find it requires a lot of education for the system integrators and customers. It’s a different way of doing things and requires training in a different type of system.

Weinschenk: How would you characterize the market?
Abraham: It is a growing market. We have not seen huge spikes, but a steady growth, whether it be local government, transportation facilities or corporate use, more and more are using surveillance to protect themselves and for business intelligence reasons. If you are in a transportation facility, how many people go through at one time? If you are a retailer, how many people enter the store at one time? How many are converted to sales? How many went to a particular section? Down a particular aisle?

Weinschenk: Do these systems use the corporate LAN or a separate network?
Abraham: I did not ask whether a company runs a separate LAN for security purposes or whether they use the LAN that already is in place. They definitely need to make sure it’s secure. If they are sending data over an IP infrastructure, they have to make sure it is not interrupting the video stream or that it is [not] being bogged down because traffic on the network is heavy.

Weinschenk: Is the market growing?
Abraham: The market is growing steadily. There is a steady conversion on the equipment side from using the analog infrastructure and equipment to more and more use of IP cameras. The IP cameras have traditionally been more expensive, but that cost differential is coming down. There are groups working on standards for the IP equipment segment so that one vendor’s equipment interoperates with another’s. That would mean that they won’t need to make sure all the cameras come from the same vendor. There is a definite trend toward higher and higher resolution for those cameras. So that means the network needs to handle higher and higher amounts of bandwidth.

Weinschenk: What do you see for this year?
Abraham: The market will still grow in 2009, but the rate of growth definitely slowed. In general, the market in terms of the number of vendors and number of solutions is very fragmented. I believe part of that is due to the nature of the business. There is a lot of government surveillance. Whether [purchases] are directly from the government or [someone working on their behalf who is installing the equipment, they tend to go with local equipment vendors. That is one of the reasons for the fragmentation.

Weinschenk: Can video surveillance affect disaster recovery/business continuity?
Abraham: Video surveillance, depending on whether it’s being used with video analytics,  can be used to monitor a particular area so a response might be quicker. But oftentimes video surveillance is used to kind of look back. Something happened and we need to look at the video from the camera that was monitoring that area and see what exactly happened. As far as recovering from disasters, I don’t know if it will help so much as monitoring to respond more quickly or go back and see exactly what happened.

Weinschenk: It sounds like a fluid market.
Abraham: In a certain sense yes. But if it is fluid, it’s a fluid that is flowing in a very slow manner. Things are moving. but it’s moving at a very slow pace because video surveillance is not a new market by any means. They have an established way of doing things. As someone pointed out to me, many of the people who would make decisions in this market are not known for being big risk takers. They say, “This has worked for me for a long time, I know how to use it, I know what it’s going to do. If it’s not broken, don’t fix it.” Over time, things changed and there’s education that takes place, [and finally they say], “OK, [newer approaches] do give me more advantages.”

Weinschenk: You paint a picture that is not all analog or all digital in a lot of organizations.
Abraham: Even in an analog system, there have been transitions. Think of the way it used to be in our living rooms. We used a VCR if we wanted to record. There already is a transition to DVR with a hard drive. We’ve already brought IP connectivity into DVRs, even if the rest of the system is analog. We can bring in what’s being stored through an IP network elsewhere on the premises or remotely. IP is coming into it, definitely, but the whole system doesn’t have to be all IP. IP still makes an impact by enabling remote access to the content. That’s already happened.

Weinschenk: Is the goal of the video surveillance department to be all IP?
Abraham: For some of them. Others see a place for IP, see advantages in parts of the system. But particularly if the system is already established, it’s a lot to go back and run Cat5 cabling. I have not heard IP over coax mentioned. There are definitely advantages to Cat5 because cameras can be powered via power over Ethernet.

Weinschenk: The ability to use IP to do such things as instantaneously find something specific – for instance, a red car that was parked in the lot at some point during the last week -- without wading through all the video is a real time saver. Is that happening?
Abraham: IP already is in part of it, so it is getting to the video. In many cases, you can do that over IP even though the whole system is not IP. When I said it was going slowly, I referred to moving the whole system to IP. Even if they are using analog cameras in a coax system, they are using an IP connection to the storage. IP can remotely connect into the network. So those types of benefits are well understood. Many have already made that move, but moving the whole system to IP may mean basically starting over in terms of wiring. That’s going to be slower. There’s a definite difference between IP in the storage area and IP throughout the whole system.